Fine Living: How To Open A Restaurant

Well, good luck to you, sir. This is a hard business in which to succeed; failure rates for new restaurants typically range between 23% and 27% in the first year alone. What’s more, even the best-run restaurant can hit a spell of bad luck and fail for reasons unforeseen by even the shrewdest manager.

But if you do all the right things and tweak the concept so that it becomes a local hot spot and a hang-out for all the right people, then there’s money to be made —just don’t expect an immediate return on investment. The National Restaurant Association expects that restaurant sales will beat the $537-billion mark this year and with nearly 12 million employees spread across 935,000 locations, serving 70 billion meals and snacks annually, there’s gold in them meals!

Concept

Any great restaurant starts with a good concept. This concept will dictate the food menu, the decor, the location, and all the other important facets of the business. It’s worth the time to sit down and write out a detailed plan listing all the key elements you’ll have to address and how you plan to approach them. At this stage, the key ideas to keep in mind include the food you plan to serve, the presentation of the restaurant itself and, critically, what sets your house apart from the pack. If you don’t already have clear ideas about each of the major details at this point, then the experts say you’re not ready to start the process.

Location

As in real estate, so too the restaurant business. The key adage here is location, location, location. Conduct as much market research as possible before choosing a site. Know the area’s key demographics: who lives there, who commutes there, is it an up-and-coming area, an already trendy area or, worse, an area whose time has passed? Above all, make sure your establishment matches the tastes of the clientele; use demographic factors like age, dining habits, ethnicity, tourism, and driving habits as factors that will inform and influence the restaurant.

When you buy the building, location is critical. The better your location, the fewer dollars you will have to pump into marketing the restaurant. Aim for a site in a highly visible location, in an area that hosts a significant number of the customers you want to attract. The rule here is to come to your customers. Don’t make them come to you, because in the early stages, they won’t.

As far as the building itself is concerned, take the time to research the history of the property you want to buy — if it was previously a restaurant, don’t be shy about asking why it’s no longer one. You might learn an important lesson. You might also want to consider the value of renovating a heritage site, if zoning laws permit. This may add to your initial investment by costing more in renovations, but it can make for a nicer property.